an all comers invitation... a few points. To be read with a bit of tongue in cheek
1. New accounting changes. You mean the latest new new accounting changes? Anything that injects new terms such as pro-forma revenues and pro-forma margins in addition to the already suspicious pro-forma earnings is worthy of increased pro-forma trust.
Whatever that's worth.
2. Growth prospects dimming or brightening? Relative term. Prospects remain quite bright. Tempered somewhat by a long track record of bright prospects receding dimly into the future to be overshadowed by newer brighter prospects, which similarly recede...
3. What significance of QCOM first in a race to WCDMA? What significance to the record time of the 97 year old man in the 95 & over division of the county marathon? First is first, and there's value in that. But first amongst the slow is still slow.
4. Capital starvation tilts balance? Yes. Towards things that don't need capital. Which reasoning extends to the consumer. Going out and buying a new gadget that does a whole bunch of things I consider irrelevant is not a good use of my capital. IMHO.
5. Story stock? Um... didn't you just repeat the story line? Pro-forma PE of 40 with zero growth is hardly indicative of anything other than belief in the upcoming happily ever after. Makes it a story stock. De facto. See 2 (Growth Prospects)
6. Telecom Glut is in networks, yes. So wireless is a bright spot in the midst of a morass of very dark and gloomy fibre. Sadly however, it's the same players who have got themselves to the edge of broke digging glass into trenches to nowhere who are in position to build out the wireless part of the networks. It's not like you can file chapter 11 on your left pocket and spend out of your right pocket.
7. Gilder & Soma & Narad. No opinion.
8. The sixty-four thousand dollar question: "Is PE of 39 fair?" Well, first, that's a pro-forma PE you're quotin'. If we could only buy the stock using pro-forma dollars (e.g. what I could earn, if only I had a job) it might be fair. However, if this and last years economic profit are of any indication, QCOM should pretty well be paying shareholders to own stock.
9. Don't bet on the end of the world. Absolutely. But more relevant isn't the end of the world but the end of your time upon it. And it's not a foregone conclusion that CDMA will be ascendant any time before this actuarial and absolutely certain eventuality. You place your bets, you takes your chances.
10. Qualcom voted place to work of the year. Yes, it might be the perkiest winter camp for over-priveledged children on the planet. And maybe it's attractively equipped with the mostest of the glitziest of toys and ameneties and services... but what does that mean? Pay me and my buddies a million bucks a year in salary and we'll vote you bestest place on the planet. For sure. Where can I sign up?
11. The stock is getting clobbered. In opposition to what's going on in the market. Hmmm... might actually have something to do with the business? Something that folks who don't read and understand all the obscure footnotes in a somewhat opaque SEC filing don't yet fully comprehend. Perhaps merely that the price per dollar of real indicated economic profits is extremely high at the moment. Compared to cash, that is.
12. LTB&H of good companies from an appropriately chosen point in the past is a good thing. Or a bad thing. Depends on the company and the time frame. IBM 30 years, good thing. DEC 15 years bad thing. QCOM 2 years awful thing. What does the future hold?
Only the shadow knows.
Back to lurking... |
